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| ONGC High, Higher, Highest! |
June 25, 2007
ONGC Board in its 168th meeting held today has approved Annual Financial Results for FY07, which signify various highs which are as follows: |
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Highest ever Turnover: Rs 56904 Crore (Up 18 %)
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Highest ever Profits: Rs 15643 Crore (Up 8 %)
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Highest ever Dividend: 310 %. Rs 6631 Crore + DDT 1013 Crore
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Highest-ever Sales Income (Turnover) of Rs. 56904 Crore (up 18 % from Rs. 48201 Crore in FY06).
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Highest-ever Net Profit of Rs. 15643 Crore (up 8 % from Rs. 14,431 Crore in FY06), notwithstanding highest-ever subsidy pay-out of Rs. 17,024 Crore (up 42.4 % from Rs. 11,957 Crore in FY06). Impact of subsidy on Net Profit – Rs. 10333 Crore. 5-year CAGR (Net Profit) - 10 %
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Recommended highest-ever Dividend of 310 % on expanded capital after bonus issue of 1:2 amounting to Rs 6631 Crore + DDT of 1013 Crore (up 3 % from 450 % dividend for FY06 amounting to Rs. 6,417 Crore) recommended. The total pay-out in absolute terms works out to Rs. 6631 Crore; the Government will get Rs. 4915 Crore (74.14%) Other Highlights.
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A total of 22 Discoveries were made which include 9 New Prospects (3 Deep waters, 1 Shallow water, 5 Onshore) and 13 New pools.
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First ulta-deepwater gas discovery of the country established in KG offshore in well UD-1 (water depth : 2841 m) in NELP block KG-DWN-98/2.
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Highest In-place Oil & Gas reserve accretion of 169.52 MTOE in 11 years; 9th time crossed the 150 MTOE milestone in 51 years of operation. Ultimate Reserve Accretion stands at 65.56 MTOE.
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ONGC Videsh Limited (OVL), the 100% owned subsidiary of ONGC, recorded the highest ever production of 7.95 MTOE of Oil + Oil Equivalent Gas in 2006-07, up 25% from 6.34 MTOE in FY06.
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With the addition of 9 more properties in FY07, OVL now has 26 projects spread in 15 countries.
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OVL’s ties in Brazil further strengthened with signing of an agreement between ONGC and Brazilian Oil Major Petrobras to swap interests in offshore blocks in India and Brazil.
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ONGC became the first Central PSU to get two of its Clean Development Mechanism (CDM) projects registered by the United Nations Framework Convention for Climate Change (UNFCCC). ONGC also is the first PSU to get CDM Validation for one of its CDM Projects.
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ONGC issued Bonus Shares in the ratio 1:2, i.e. 1 bonus share for 2 equity shares (held on 30th October 2006), increasing the paid-up capital of ONGC from Rs. 1425.9 Crore to Rs. 2138. 87 Crore.
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A. Financials:
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The Board of Oil and Natural Gas Corporation Ltd. (ONGC) - India’s flagship E&P company - has recommended a final dividend of 130 % for fiscal 2006-07, thus making the aggregate dividend to 310 %, as 180% has already been paid earlier, on the post-bonus expanded equity capital of the oil major.
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Amounting to Rs. 6631 Crore, this is the highest-ever dividend pay-out in absolute terms by any Indian corporate (last fiscal’s dividend payout was Rs. 6,417 Crore). On a face value of Rs. 10 per share, the annual dividend works out to Rs. 31 per share.
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Declaring the audited financial results for FY07 to the media on 25th June 2007, soon after the ONGC Board meeting, CMD Mr. R S Sharma said, “ONGC’s growth-oriented business plans are well on track, to achieve the high targets set to fulfill the aspirations of all the stakeholders.”
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Apart from Dividend, the other financial parameters of ONGC for FY07 are:
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Highest-ever Sales Income (Turnover) of Rs. 56904 Crore. 60 % of the Turnover arrived from sale of Crude Oil, 12 % from sale of Natural Gas and 11 % from sale of Value-Added-Products (VAPs) like LPG, NGL, ARN, Trading - 10 %, Others - 7 %. The Compounded Annual Growth Rate (CAGR) in Gross Income in last 5 years is 10 %
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Capital Expenditure rose to Rs. 13305 Crore (up 26 % from Rs. 10,591 Crore in FY06). Out of this, 98.2 % was spent on Exploration & Production (E&P).
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ONGC continues to be a zero debt Company.
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Group Results
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The Group turnover (ONGC, OVL and MRPL) on gross basis adds up to Rs. 86276 Crore, 16 % higher than Rs. 74,234 Crore in the previous fiscal.
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The net profit of the group companies add up to Rs. 17770 Crore, up by 15 % from the last year’s net profit of Rs. 15,398 Crore.
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B. Exploration
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The exploratory efforts of ONGC led to 22 discoveries, out of which:
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9 are New Prospects (3 Deep waters, 1 Shallow water, 5 Onshore)
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13 are New pools
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With the discovery in the well KG-DWN-98/2-UD1, drilled at 2841 m water depth, ONGC established the first ulta-deepwater gas discovery in the country.
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ONGC recorded In-place Reserves accretion (ONGC operated areas) of 169.52 MTOE, Highest in 11 years after 1995-96. It also crossed the 150 MTOE mark the 9th time in 51 years of operation.
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ONGC also recorded Ultimate Reserve Accretion of 80.29 MTOE
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ONGC operated fields: 65.56 MTOE
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ONGC’s share in Domestic JVs (PSCs): 4.77 MTOE
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ONGC’s share in Overseas JVs (OVL): 9.96 MTOE
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A total of 88 Exploratory and 178 Development wells were drilled in the fiscal
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In the FY07, 24,163 square kilometres of 3D Seismic Data and 9,751 kilometres of 2-D Seismic Data were acquired,the later in relatively less explored areas
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C. Production
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Crude Oil production went up by 9% to 26.05 MMt in FY07, from 24.4 MMt in FY06.
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Natural Gas production was maintained at 22.44 billion cubic metres (BCM) compared to 22.57 BCM in FY06, despite massive disruptions of operations in Hazira Plant due to flood.
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Total Oil plus Oil Equivalent (O+OEG) production also went up to 48.49 MTOE in FY07 from 46.97 MTOE in FY06
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Value Added Products (VAP) totalled 3.238 MMt (3.428 MMt in FY06).
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Joint Ventures Crude Oil production rose to 1.89 MMt (1.71 MMt in FY06) and Natural Gas production increased to 2.47 BCM (2.43 BCM)
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C. Sales (including JVs)
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Crude oil: 24.41 MMT (22.45 MMT)
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Natural Gas: 20.30 BCM (20.50 BCM)
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Value Added Products: 3.179 MMt (3.373 MMt)
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D. Initiatives in FY07
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D.1 Exploration
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D.1.1 NELP
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Out of 52 oil and gas blocks awarded under NELP-VI, ONGC has been awarded 24 blocks as operator and one more block (PR-OSN-2004/1) with Cairn Energy as operator (ONGC share 35 %)
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Cumulatively, in the six (6) NELP rounds, ONGC has secured 85 out of 161 blocks (53%) awarded. It currently holds 62 blocks with operatorship & 10 with participative interest and had surrendered 13 blocks.
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D.1.2 Seismic API
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High Resolution Seismic Survey for Underground Coal Gasification carried out with departmental efforts in Vastan area in Gujarat.
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Virtual Reality Centres (VRC) commissioned at Dehradun and Jorhat, taking the total count of Virtual Reality Centres in ONGC to five.
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ONGC has employed best-in-class technologies in all areas of E&P.
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D.1.3 ONGC signs PEL agreements with Govt. of Nagaland
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PEL agreements signed for 3 nomination and 2 NELP exploration blocks with Govt. of Nagaland on 1st May 2006, paving the way for resumption of E&P operations, suspended since May 1994, in Nagaland.
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D.2 New/ Marginal Fields
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ONGC produced 0.49 MMt crude oil and 22.6 MMSCM Gas from Marginal Fields in 2006-07.
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ONGC holds 165 marginal fields (Offshore-80, Onshore-85), out of which 44 (offshore-3, Onshore-41) are already being monetized, 90 (Offshore-52, Onshore-38) are under monetization and 31 (Offshore-25, Onshore-6) are to be monetized.
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D.3 Production milestones
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D.3.1 Hazira Plant operations restored in record time
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Hazira Plant restored to full capacity of gas processing of 40 MMSCMD on 8 September, 2006, ahead of schedule, after being forced to shut down from 7-8 August, 2006 due to unprecedented flash floods.
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D.3.2 Mumbai High completes 30 years of commercial production
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On 21st May 2006 Mumbai High completed 30 years of commercial production. To date, Bombay High and its satellite fields have produced 475 million tonnes of crude and 315 BCM of gas. This field is still a prolific producer, even after 31 years of sustained production.
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D.5 Projects
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9 Projects to augment oil production from Offshore are currently under way; 2 for Redevelopment, 1 for Improved Oil Recovery and 6 for New field Development. In Onshore, there are 3 projects for Improved Oil Recovery and one on Value-Addition.
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D.6 Collaboration for growth
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D.6.1 MoUs/HOA (Heads of Agreement) with E&P companies:
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a. Agreement with ENI
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b. Protocol agreement between ONGC & Gazprom
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c. MOU with Rosneft, Russia
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D.6.2 MoU with E&P Service Providers
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a. HOA (Heads of agreement) signed with Halliburton
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b. MOU with CGG, France
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c. MOU with TGT, Russia for increasing Recovery Factor
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D.6.3 MoU with facilitators
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a. MOU with SCCL (Singareni Collieries Company Ltd.) for co-operation in Underground Coal Gasification (UCG), Surface Coal Gasification (SCG) and Coal Bed Methane (CBM).
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b. MOU with Ashok Leyland Project Services (ALPS)
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c. MOU with IOC for ATF
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d. Agreement with M/s GSPCL for sale of gas from Olpad
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e. Agreement with ARI, Pune and BHU, Varanasi
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D.7 Value-chain Integration
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ONGC Mangalore Petrochemicals Limited (OMPL), SPV, incorporated on 19th December 2006 at Mangalore at Rs. 4,852 Crore. (ONGC’s equity - 46%)
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ONGC Petro-addition Ltd. (OPaL) incorporated on 15th November 2006 at Project cost: Rs. 13,540 Crore – ONGC’s investment Rs. 992 Crore (ONGC equity : 26%).
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ONGC Tripura Power Company Pvt. Limited (OTPC) developed by a SPV, with an estimated investment of Rs. 3,900 Cr, ONGC’s equity – Rs. 576.63 Cr.
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D.8 Finance/ Commercial
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a. Bonus shares (1:2) allotted in November 2006, taking ONGC’s equity base to 2138.87 Crore.
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b. Capex for the year 2006-07 has been Rs. 13,305.03 Crore against the plan outlay (RE 2006-07) of 16,521.83 Crore (utilization 92.69%). ONGC has set a Capex outlay of 16 Billion US Dollars (Rs. 75,984 Crore) in its XI Five Year Plan (2007-2012). ONGC is eyeing a production of over 140 Million Metric Tonnes of Crude oil during the XI Plan (increase of 10 MT over the X Plan) and 112 Billion Cubic Metres (BCM) of Natural Gas.
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c. ONGC & GAIL signed Gas Sales Agreement (GSA) on 7th July, 2006.
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d. ONGC has, cumulatively, paid a total subsidy of Rs. 35,774 Crore. For 2006-07, ONGC has paid a subsidy of Rs. 17,024 Crore (up 41 % from Rs. 11,956 Crore)
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e. Received Rs. 1,160 Cr from GAIL on account of transfer of Surplus Gas Pool Account-2.
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f. Received Income Tax refund of Rs 570 Crore.
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E. New Energy Sources
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ONGC is pursuing clean coal opportunities systematically through Coal Bed Methane (CBM), Underground Coal Gasification (UCG). ONGC is also associated with National Gas Hydrate Program (NGHP). While remaining focused on Oil and Gas E&P, it is setting up an Energy Centre at New Delhi for holistic research in new Energy sources which can be brought to market. It is also pursuing renewable sources, setting up two 50 MW wind power farms in Gujarat and Karnataka.
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F. Subsidiaries:
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F.1 Wholly-owned subsidiary ONGC Videsh Ltd. (OVL) –
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India’s Biggest Multinational with a total overseas investment of over 5 billion US dollars
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F.1.1 Presence in 15 countries with 26 projects:
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Vietnam (3), Sudan (4), Myanmar (2), Libya (3), Syria (2), Iran (1), Iraq (1), Russia (1), Brazil (1), Cuba (2), Egypt (1), Nigeria Saotome JDZ (1), Nigeria (2), Qatar (1) and Colombia (1)
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F.1.3 Sourced 7.95 MMT of Equity Oil & Gas during 2006-07
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Oil & Gas production up 25 % over 2005-06 (7.95 MMTOE as against 6.34 MMTOE)
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Crude Oil : 5.80 MMT (4.58 MMT)
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Natural Gas : 2.15 BCM (1.76 BCM)
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First shipment of Sakhalin-1 crude (approx. 672,000 bbls of Sokol Crude) arrived at Mangalore, on 2nd Dec 2006.
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OVL made maiden foray in Latin America with BC-10 (15% stake) deepwater block in Brazil.
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ONGC Videsh Ltd. is Operator in 2 exploratory blocks in Cuba
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Signed Production Sharing Contract (PSC) with PetroVietnam for Blocks 127 & 128 in Offshore Vietnam
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30% interest in 6 exploratory blocks in Cuba approved by Govt. of Cuba
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OMEL wins two prospective oil & gas blocks in the Nigeria
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5A field in Sudan commences production on 26th June 2006
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F.2 Mangalore Refinery & Petrochemicals Limited
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F.2.1 Physical performance
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Throughput: 12.531 MMTPA, up by 3.42% from 12.117 MMT
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Capcity utilization: 129% (based on design capacity of 9.69 MMTPA).
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F.2.2 Financial Performance
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Turnover: Rs 32,376 Crore, up by 14.6% from Rs 28,243 Crorein FY06
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Net Profit: Rs. 525 Crore, up by 41 % from Rs 372 Cr. In FY06
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F.2.3 Direct export
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For the first time MRPL finalized agreements with STC, Mauritius & ADNOC, Dubai, on bilateral basis, for supply of 1.5 MMTPA of petroleum products.
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MRPL upgradation from the present 9.69 MMTPA to 15 MMTPA.
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F.2.4 Significant achievements
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The refinery achieved highest-ever safety performance of 1,247 reportable accident free days operation on 10th May, 2007, surpassing its previous record of 706 days.
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G. HSE (Health, Safety and Environment)
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All operational facilities and rigs – onshore as well as offshore – certified for Health, Safety and Environment Management (HSE) under relevant International and National codes, certified through independent verifications.
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ONGC is the first PSU to achieve CDM Validation for CDM project ‘Waste heat recovery from Process Gas Compressors (PGCs)’ on 14th Dec 2006. ONGC also got its second CDM project registered with UNFCCC.
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H. Corporate Ranking of ONGC
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a. ONGC 402nd in Fortune Global 500 list (July 2006)
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b. ONGC clinches the top E&P company rank in 2006 Platts Top 250 Global Energy Companies list (September 2006).
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c. ONGC ranked 21st in PFC Energy 50 list (January 2006)
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d. ONGC leads Indian companies in Forbes 2000 list (239 rank, 2007)
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e. ONGC in Fortune’s list of World’s Most Admired Companies 2007
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f. ONGC the Biggest Wealth Creator (January 2007)
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g. The BW Real 500 ranking : ONGC ranked 3rd (March 2006)
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h. ONGC ranked 158th in FT Global 500 (March 2006)
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i. ONGC India’s most respected PSU in PSU category in the 2006 Businessworld Magazine. (June 2006).
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j. ONGC tops the list of Super 100 list (Business India, December 2006)
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I. Awards & Accreditations
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a. MOU Excellence Certificate for the year 2005-06
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b. NDTV Profit Business Leadership Award on July 28, 2006.
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c. People’s Award for Excellence in Business & Economy: under PSU category instituted by Planman Media on 16th June 2006 at New Delhi.
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d. Dun & Bradstreet-American Express Corporate Awards 2006
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e. ‘Amity Corporate Excellence Award’ for excellence in Corporate Governance.
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f. National Safety Awards (Mines): ONGC received 8 National Safety Awards (Mines) for the year 2002 and 2003, which were announced on 14th February 2007 at New Delhi.
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g. Golden Peacock Global Award for Corporate Governance on 12th May 2006.
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h. Uttaranchal-IT 2006 Award on 1st June 2006.
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i. Greentech Environment Excellence Silver Award for IPSHEM on 31st August 2006 at Goa.
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j. ONGC first PSU to get ISO 9001 for Internal Audit on 6th December 2006
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k. Golden Peacock Award 2006, instituted by Institute of Corporate Governance (IOD), for Corporate Governance in PSU category on 29th Nov 2006 at New Delhi.
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l. Petroleum Minister’s PSEB Trophy for overall excellence in sports for the years 2004-05 and 2005-06 on 21st November at New Delhi.
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m. Award for sports promotion: All India Public Sector Sports Promotion Board adjudged ONGC as the best sports promoter among all PSUs. The award was handed over on 24th June 2006 at Bangalore.
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n. Rig E-1400-17 of Rajahmundry Asset also won the 'Greentech Health Safety Environment' Gold Award’.
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o. Green Tech Environment Excellence Gold Award 2006 for Tatipaka Refinery, in the Petroleum Refining Sector.
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p. CNBC-TV18 CFO Award 2006 to C&MD and Director (Finance), for excellence in Finance in the Oil and Allied Services category.
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q. AIMA Fellowship to Director (HR) conferred on 5th August 2006 at New Delhi.
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r. Director (HR) elected National President of the National Institute of Personnel Management (NIPM), on 17th June 2006.
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s. Best HR-Head to Director (HR) by Amity International Business School on 31st August, 2006.
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J. Sports
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a. ONGCians shine in 15th Asian Games at Doha, Qatar (28th Nov to 15th Dec 2006) bagging 8 out of 10 gold medals won by India. ONGCian Jaspal Rana with three gold medals was ranked as one of the best performers.
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b. PSPB: ONGC the Champion during 2005-06.
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c. C&MD, ONGC nominated as PSPB President
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d. ONGC Cup – 11th National Football League
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e. Khel Ratna Award to ONGCian Pankaj Advani
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f. Ms Koneru Humpy, World No.2 in Women Chess joins ONGC
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g. ONGC wins Hot weather Cricket Tournament held at New Delhi (June 2007)
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ONGC Board approves investments to add value in offshore business
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The Board of Oil and Natural Gas Corporation Ltd. (ONGC), in its 168th Board meeting held on 25th June 2007, has approved the following investment proposals, which will augment crude oil production and improve efficiency:
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(i) Development of 8 marginal fields in Arabian Sea
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ONGC will develop eight (8) marginal fields of B-193 cluster (viz. B-193, B-172, B-178, B-179, B-180, B-28A, B-23A and B-28) in the Arabian Sea, south of its giant Bassein Gas field. The total estimated cost of the development will be Rs. 3248.78 Crore, and will be carried out in two phases.
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The peak envisaged Oil, Condensate and Gas rates are around 28,150 BOPD, 1870 BCPD and 1.52 MMm3/d respectively with cumulative Oil, Condensate and Gas production of 5.57 MMt, 0.75 MMt and 5.12 BCM respectively in 15 years. The Field development scheme envisages deployment of innovative cost cutting platform design besides other measures to make the project financially attractive.
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(ii) 12 New Offshore Support Vessels (OSVs) to replace 12 existing ones
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To reap the benefits of technological advancements, ONGC has decided to construct 12 new Offshore Support Vessels (OSVs) with state-of-the-art technology. The total cost of the construction will be Rs. 736.65 Crore.
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The new-generation OSVs, apart from resulting in substantial fuel savings, will also be in line with UKOOA guidelines.
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For further information, please visit our website www.ongcindia.com
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Conversion Rates:
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INR/1 USD : 40.71 (as on 22nd June, 2007)
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Listing references (as on 22nd June, 2007):
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ONGC: BSE – Rs. 908.65
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NSE – Rs. 909.60
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MRPL: BSE – Rs. 41.10
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NSE – Rs. 41.15
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Notes to Editors:
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Oil and Natural Gas Corporation Ltd. (ONGC), a Fortune-Global 500 Company, is recognized as the Numero Uno E&P Company in the world and 20th among leading global Energy majors as per ‘Platts Top 250’ Global Energy Company Ranking 2006. ONGC is ranked 15th among Global Integrated Oil & Gas Companies by Market Capitalization in PFC Energy 50. ONGC is placed at the top of all Indian Corporates listed in Forbes Global 2000 (rank 239th) and Financial Times Global 500 (rank 326th). It is ranked 402nd in Fortune-500 by Turnover, and 115th by profits (first from India).
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ONGC has established over 6.4 billion tonnes of In-place hydrocarbon reserves with more than 340 discoveries of oil and gas; in fact, 6 out of the 7 producing basins have been discovered by ONGC; out of these In-place hydrocarbons on domestic acreages, Ultimate Reserves are 2.1 Billion Metric Tonnes (BMT) of Oil plus Oil Equivalent Gas (O+OEG).
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ONGC has cumulatively produced 740 million metric tonnes (MMT) of crude, 425 Billion Cubic Meters (BCM) of Natural Gas and 54,000 tonnes of Value-Added-Products (VAP) from 136 domestic onshore production fields and 7 domestic offshore fields. ONGC contributes more than 80 per cent of the total indigenous production of hydrocarbons.
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Even with the advent of the New Exploration Licensing Policy (NELP) in India, ushering in competitive regime in the Indian petroleum industry, ONGC has established its supremacy by bagging 85 out of the 161 blocks (53%), awarded in the 6 rounds of competitive bidding of NELP so far (25 out of 52 blocks in the sixth round). It operates around 6 lakh square kilometres of exploration area - holding 60% of exploration acreage of the country.
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ONGC, through it wholly-owned subsidiary ONGC Videsh Ltd. (OVL), trans-nationally operates Exploration & Production (E&P) business in 15 countries. Going by investments abroad (over US$ 5 billion), OVL is the biggest Indian multinational, and by production of oil and gas, is second in India, after its parent company.
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Disclaimer
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The information contained in this communication is intended solely for the use of media - individual or entity to whom it is addressed and others authorized to receive it. It may contain confidential or legally privileged information. If you are not the intended recipient you are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and is unlawful.
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